Solution

Class 12 - Accountancy

Full Paper Accounts

Section A
1. (d) 10,000
Explanation: Rent paid to a partner is a charge against the profit. It means it will be paid whether there is
profit or loss in the business. In this case rent payable to the partners is Rs.10,000. This rent is a charge
against profit.
2. (a) Sacrificing Ratio
Explanation: When a new partner is admitted into the partnership firm, then he brings some amount of
premium for goodwill which will be shared/distributed by the sacrificing partners in their sacrificing ratio.
Sacrificing ratio = Old ratio - New ratio
3. (d) It can be used for writing off capital losses.
Explanation: Reserve Capital is used only in the event of winding up of the company thus; it cannot be
used to write off capital losses of the company.
4. (a) Owner’s equity
Explanation: NPO doesn't have any owners equity, they can take debt. capital fund is shown in the balance
sheet instead of Owners equity.
5. (c)
A's Capital A/c Dr. 20,000  

B's Capital A/c Dr. 8,000  

To Deferred Advertisement Expenditure

    28,000
A/c

Explanation: At the time of dissolution, all fictitious assets and accumulated losses should be debited to the
partners’ capital accounts. this loss will be distributed among partners. Deferred Advertisement
Expenditure A/c Will be written off through partner's capital A/c.
6. (a) Company is a Natural Person
Explanation: A company is not a natural person i.e it is an artificial person. Following three points are
correct about a company:
i. Company is an Artificial Person
ii. Company has a separate entity
iii. Company has a common seal
iv. Company has perpetual existence
v. Company has unlimited liability
vi. Management and ownership of the company are separate
7. (c) Realisation Account
Explanation: At the time of dissolution of the firm, the assets and liabilities appearing on the Balance
Sheet are transferred to the Realisation Account. When a firm decides to discontinue its operations, all
assets need to be disposed off and all liabilities need to be discharged. For this purpose, a Realisation
account is opened where all the assets, excluding cash at hand and bank Ioan to a partner and
accumulated losses are shown on the debit side at their book values and all the external liabilities are
shown on the credit side at their book value. Any sale of assets or discharge of liabilities is also shown in
this account.
8. (d) Both Goodwill and Reserves and Accumulated profits
Explanation: Due to Change in profit sharing ratio following adjustments are made in the partner’s capital
accounts with respect to undistributed profits and reserves, revaluation of assets and reassessment of
liabilities, etc.

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 The valuation of goodwill of a firm, its treatment, adjustment regarding undistributed profits and reserves
and revaluation of assets and liabilities due to change in the profit sharing ratio of the partners.
9. 1. Admission
2. Retirement
3. Death
10. (c) Credited to Revaluation Account
Explanation: In revaluation account decrease in assets and increase in liability is debited and increase in
asset and decrease in liability is credited. Difference between the two sides show profit and loss. Profit and
loss on revaluation is distributed among existing partners.
11. (a) Profit and Loss Appropriation Account
Explanation: Following accounts are prepared at the time of retirement of a partner except for profit and
loss appropriation account:
Revaluation Account
Partner’s capital and current  account
Balance Sheet
12. (d) Rs.1,50,000
Explanation: Calculation of Goodwill:
1. Average profit = Rs.65,000
2. Capital Employed = 6,80,000 – 1,80,000 = 5,00,000
3. Normal Profit = 5,00,000 × 10/100 = 50,000
4. Super Profit = 65,000 – 50,000 = 15,000
5. Goodwill = Super Profit × 100/NRR = 15,000 × 100/10 = 1,50,000
rate × 5.5
13. (a)
100 × 12

Explanation: In the case of drawings, when a fixed amount is withdrawn at the end of the last day of every
month, interest in drawings will be calculated as follows:
period af ter 1st installment + period af ter last installment 11+0 11
Step 1. Average Time Period =   = =  = 5.5
2 2 2
Rate 5.5
Step 2. Total Drawings ×     ×
100 12

14. Income and Expenditure Account for the year ending March 31, 2018
Dr. Cr.

Expenditure Amount (₹) Income Amount (₹)

By Interest on General Fund Investments 80,000

Balance Sheet as on March 31, 2018
Liabilities Amount (₹) Assets Amount (₹)

General Fund 8,00,000 General Fund Investment 8,00,000

Sports Fund (Opening Balance) = 3,50,000 Sports Fund Investment 3,50,000

Add: Interest on Sports fund Investment = 40,000

Add: Donation for Sports Fund = 1,50,000

Less: Sports Prizes Awarded = 1,00,000

Less: Expenses on Sports Events = 40,000 4,00,000

1. Interest on General Fund Investments will be shown on Income side of the Income and Expenditure
Account.
2. General Fund will be shown in the liabilities side of the Balance Sheet and General Fund Investments on
the Assets side of the Balance Sheet.
OR
Books of Royal Club
Income and Expenditure Account
for the year ended March 31, 2018

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 Dr. Cr.

Expenditure Amount (₹) Income Amount (₹)

To Salaries 31,500 By Subscriptions 60,000

To Postages 1,250 Add: Outstanding Subscription 15,000 75,000

To Rent 9,000 By Entrance fees 1,100

To Printing and Stationery 14,000 By Sale of Old Magazines 450

To Miscellaneous Expenses 3,100 By Interest Accured on Investments 3,500

To Depreciation on Furniture 1,000

To consumption of sports material 10,000

To Surplus (b/f) 10,200

To Surplus 80,050 80,050

Working Note:-
6
i. Calculation of Depreciation = 20,000 × 10% × = 1,000
12

ii. Sports Material Consumed = Opening Stock + Purchases - Closing Stock

= 3,000 + 11,500 - 4,500 = 10,000
15. Calculation of Interest Charged On Drawings
Interest charged on A's drawings = ₹ 8,000

Interest charged on B's drawings = ₹ 6,000

Interest charged on C's drawings = ₹ 4,000

₹ 18,000
This amount of ₹18,000 is an item of income for the firm but this has not been recorded on the credit side of P
& L Appropriation A/c of the previous year. As such the profit of the previous year will now be increased by
this amount. Hence, this profit of ₹ 18,000 will be shared by the partners in their profit sharing ratio of 5 : 3 :
1 which amounts to A = ₹10,000, B = ₹6,000 and C = ₹2,000.
TABLE SHOWING ADJUSTMENTS
Adjustment Difference
Partner
Dr. Cr. Dr. Cr.

A 8,000 10,000 2,000

B 6,000 6,000

C 4,000 2,000 2,000

JOURNAL ENTRY
Date Particulars L.F. Dr. (₹) Cr. (₹)

C's Capital A/c Dr. 2,000

To A's Capital A/c

2,000
(Adjustment for omission of interest on drawings)
OR
In the books of firm
Journal
Debit Credit
Date Particulars L.F.
₹ ₹

Profit and Loss Appropriation A/c Dr. 82,500

To Naresh's Capital A/c 42,500

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 To Sukesh's Capital A/c 40,000
(Being interest on capital transferred to Profit and Loss Appropriation
Account)

Profit and Loss Appropriation A/c Dr. 1,17,500

To Naresh's Capital A/c 58,750

To Sukesh's Capital A/c

(Being profit transferred to Partners Capital Account)(Refer Working 58,750
NOte)
Working Notes:
i. Calculation of Opening Capital:
Particulars Naresh(Rs.) Sukesh(Rs.)

Capital in the end 3,00,000 3,00,000

Add: Out of Capital Drawings 50,000 -

Add: Against Profit Drawings 1,00,000 1,00,000

Opening Capital 4,50,000 4,00,000

ii. Calculation of Interest on capital:

Interest on Naresh's Capital
4,50,000×10×6 4,00,000×10×6
= ( ) + ( )
100×12 100×12

= ₹ 42,500
Interest on Sukesh's Capital
4,00,000×10
= 100
= ₹ 40,000
16. Journal
Date Particulars L.F. Debit (Rs.) Credit (Rs.)

Share Capital A/c (10x8) Dr. 80 .

To share First Call/calls in arrear A/c 30

To Forfeited Shares A/c 50

(Being 10 Shares forfeited for nonpayment of first call money)

17. JOURNAL
Amount Amount
Date Particulars L.F.
Rs. Rs.

Realisation A/c Dr. 1,900

To S's Capital A/c

(Being S's husband loan was taken over by S, transferred to her 1,900
capital account)

Bank A/c Dr. 750

To Realisation A/c
750
(Being debtors realised as 930 in 750)

T's Capital A/c Dr. 1,330

To Realisation A/c
(Being the investment taken over by T transferred to his capital 1,330
account)

Realisation A/c (working note no 1) Dr. 910

To Bank A/c 910

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 (Being creditors settled of 1,000 at 9 % discount))

S's Capital A/c Dr. 300

To Realisation A/c
(Being the realisation expenses born by S transferred to her capital 300
a/c)

S's Capital A/c(940 x 3/5) Dr. 564

T's Capital A/c(940 x 2/5) Dr. 376

To Realisation A/c
(Being the loss on realisation transferred to partners’ capital Dr. 940
accounts )
Working note:
total creditor = 1,000
discount = 9% i.e 1,000 x 9 /100=90
so the payment is 1,000 - 90 =910
18. Ratio of effective capital will be calculated as under:
Products

X: ₹90,000 for 6 months 5,40,000

₹60,000 for 6 months 3,60,000

9,00,000

Y: ₹75,000 for 4 months 3,00,000

₹90,000 for 4 months 3,60,000

₹60,000 for 4 months 2,40,000

9,00,000

Z: ₹75,000 for 7 months 5,25,000

₹1,35,000 for 5 months 6,75,000

12,00,000
Thus the profit-sharing ratio would be:
9,00,000 : 9,00,000 : 12,00,000 or 3 : 3 : 4
PROFIT AND LOSS APPROPRIATION ACCOUNT
for the year ended......
Dr. Cr.

Particulars Amount(₹) Particulars Amount(₹)

To Profits transferred to: By Profit & Loss A/c 42,000

X's Capital A/c 12,600

Y's Capital A/c 12,600

Z's Capital A/c 16,800 42,000

TOTAL 42,000 TOTAL 42,000

19. Income and Expenditure Account of Rajasthan Society
for the year ending March 31, 2014
Dr. Cr.

Expenditure ₹ Income ₹

To Honorarium to Clerk 10,000 By Subscription (600 × 10 × 12) 72,000

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 To Car Expenses 4,200 By Interest on Investments 2,700

To Insurance Premium 1,200 Add: Accrued Interest 300 3,000

Less: Prepaid Insurance 300 900 By Rent of the Hall 8,700

To Medicines 800 Add: Accrued Rent 2,000 10,700

Add: Outstanding Bill 200 1,000 By Grant from Local Authority 4,000

To Charities 2,000 By Proceeds of Charity Show 16,800

To Meeting Expenses 5,400 By Sundries 1,200

To Electricity 4,800 By Entrance Fees 5,000

To Expenses on Charity Show 6,200

To Surplus (Excess of Income over Expenditure) 78,200

1,12,700 1,12,700
Balance Sheet of Rajasthan Society
as on March 31, 2014
Liabilities ₹ Assets ₹

Capital Fund Prepaid Insurance 300

Opening Balance 3,800 Accrued Interest 300

Add: Donation (17,500 + 2,500) 20,000 Accrued Rent 2,000

Add: Entrance Fees 10,000 Car 80,000

Add: Surplus 78,200 1,12,000 Investment 20,000

Endowment Fund 14,000 Building Advance 25,000

Life Membership Fees 6,000 Subscription Outstanding

Medicine Bill Outstanding 200 Add: Outstanding (2012-13) 200

Subscription Received in Advance 500 Add: Outstanding (2013-14)(2,000 + 2,500) 4,500 4,700

Cash 400

1,32,700 1,32,700
Balance Sheet of Rajasthan Society
as on March 31, 2013
Liabilities ₹ Assets ₹

Capital Fund (Balancing Figure) 3,800 Cash 3,000

Subscription Outstanding 800

3,800 3,800
20. JOURNAL
Date Particulars L.F. Amt (Dr) Amt (Cr)

Bank A/c (25,000*120) Dr 30,00,000

To Debenture Application and Allotment A/c

30,00,000
(Being application money received)

Debenture Application and Allotment A/c Dr 30,00,000

To 10% Debentures A/c (25,000*100) 25,00,000

To Securities Premium Reserve A/c (25,000*20) 5,00,000

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 (Being application money transferred to 10%
debentures account)
Balance Sheet
as at..........
Particulars Note No. Amt (Rs)

I. EQUITY AND LIABILITIES

1 Shareholders' Funds

Reserve and Surplus 1 5,00,000

2 Non-current Liabilities

Long-term Borrowings 2 25,00,000

Total 30,00,000

II. ASSETS

1 Current Assets

Cash and Cash Equivalents 3 30,00,000

Total 30,00,000
Notes to Accounts
Particulars Amt (Rs)

1 Reserves and Surplus

Securities Premium Reserve 5,00,000

2 Non-current Liabilities

10% Debentures 25,00,000

3 Cash and Cash Equivalents

Cash at Bank 30,00,000

JOURNAL
Date Particulars L.F. Amt (Dr) Amt (Cr)

(i) Bank A/c Dr 20,00,000

To Bank loan A/c

20,00,000
(Being bank loan taken)

(ii) Debenture Suspense A/c Dr 25,00,000

To 10% Debentures A/c

(Being 25,000, 10% debentures of Rs.100 25,00,000
each issued as Collateral security)
Balance Sheet
As at ...........................
Particulars Amt (Rs)

1 EQUITY AND LIABILITIES

Non-current Liabilities

Long-term Borrowings 20,00,000

Notes to Accounts
Particulars Amt (Rs)

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 1 Long-term Borrowings

Loan from Bank 20,00,000

25,000, 10% Debentures of Par Value of Rs.100 each Issued as Collateral

25,00,000
Security

(-)Debenture Suspense (25,00,000)

20,00,000
JOURNAL
Date Particulars L.F. Amt (Dr) Amt (Cr)

Machinery A/c Dr 28,00,000

To Vendor's A/c
28,00,000
(Being machinery purchased)

Vendor's A/c Dr 28,00,000

To 10% Debentures A/c (25,000*100) 25,00,000

To Securities Premium Reserve A/c

(Being 25,000, 10% debentures issued to the supplier of 3,00,000
machinery at premium)
Balance Sheet
As at................................
Particulars Note No. Amt (Rs)

I. EQUITY AND LIABILITIES

1 Shareholders' Funds

Reserves and Surplus 1 3,00,000

2 Non-current Liabilities

Long-term Borrowings 2 25,00,000

Total 28,00,00

II. ASSETS

1. Non-current Assets

Fixed Assets

Tangible Assets 3 28,00,000

Total 28,00,000
Notes to Accounts
Particulars Amt (Rs)

1 Reserves and Surplus

Securities Premium Reserve 3,00,000

2 Long-term Borrowings

10% Debentures (25,000 debentures @ Rs.100) 25,00,000

3 Tangible Fixed Assets

Machinery 28,00,000
NOTES :

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 Debentures issued as collateral security being for the loan of the company, debentures issued as
collateral security are shown in the Note to Accounts in which loan is secured by debentures is shown.
If the company fails to pay the loan along with interest with the time, the lender may recover the dues
from the sale of primary security or by seeking redemption of collateral security.
21. Revaluation Account
Particulars Rs. Particulars Rs.

To Provision for doubtful debts 1000 By Machinery 3000

To Outstanding Salaries 2000 By Stock 2000

To Profit Transferred:

M 1250

N 750 2000

5000 5000
Partner's Capital Accounts
Particulars M N R Particulars M N R

To Cash 1500 500 - By Balance b/d 12000 10000 -

To Balance c/d 14750 11250 8000 By Cash - - 8000

By Premium for goodwill 3000 1000 -

By Revaluation 1250 750 -

16250 11750 8000 16250 11750 8000

Balance Sheet
Liabilities Rs. Assets Rs.

Outstanding Salaries 2000 Machinery 15000

Creditors 4000 Stock 10000

B/P 2000 Debtors 7200

Capital A/cs: Less: Provision 1000 6200

M 14750 Bank 500

N 11250 Cash 10300

R 8000 34000

42000 42000
Working Notes: Calculating Sacrificing Ratio:-
Old Ratio of M and N = 5:3
New Ratio of M, N and R = 7:5:4
Sacrificing Ratio = Old Ratio - New Ratio
M = 5/8 - 7/16 = 3/16
N = 3/8 - 5/16 = 1/16
Therefore, the Sacrificing Ratio = 3:1.
OR
Revaluation Account
Particulars Rs. Particulars Rs.

To Stock 1800 By Building 15000

To Furniture 440

To Provision 275

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 To Profit Transfer:

X 4994

Y 7491 12485

15000 15000
Partner's Capital Accounts
Particulars X Y Z Particulars X Y Z

To Balance c/d 47044 53541 30000 By Balance b/d 34050 34050 -

By Cash - - 30000

By Premium for Goodwill 8000 12000 -

By Revaluation 4994 7491 -

47044 53541 30000 47044 53541 30000

Balance Sheet of new firm
Liabilities Rs. Assets Rs.

Creditors 12435 Cash 50710

Capitals: Bank 11925

X 47044 Debtors 5500

Y 53541 Less: Provision 275 5225

Z 30000 130585 Stock 16200

Building 55000

Furniture 3960

143020 143020
22. JOURNAL
Date Particulars LF Amt (Dr) Amt (Cr)

Bank A/c..........Dr. 1,44,800

To Equity Share Application A/c 1,44,800

(Being share application money received.)

Equity Share Application A/c..........Dr. 1,44,800

To Equiry Share Capital A/c 1,00,000

To Equity Share Allotment A/c 20,800

To Bank A/c 21,000

To calls-in- advance A/c 3,000

(Being share application money due.)

Equity Share Allotment A/c..........Dr. 1,00,000

To Equity Share Capital A/c 1,00,000

(Being share allotment money due.)

Bank A/c..........Dr. 71,200

Calls-in-arrears A/c..........Dr. 8,000

To Equity Share Allotment A/c 79,200

(Being share allotment money received.)

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 Equity Share Capital A/c..........Dr. 20,000

To Calls-in-arrears A/c 8,000

To Share Forfeiture A/c 12,000

(Being share forfeited.)

Bank A/c..........Dr. 20,000

To Equity Share Capital A/c 20,000

(Being shares issued to sultan.)

Share Forfeiture A/c..........Dr. 12,000

To Capital Reserve A/c 12,000

(Being balance of share forfeiture transferred to capital reserve.)

Equity Shares First Call A/c..........Dr. 1,50,000

To Equity Shares Capital A/c 1,50,000

(Being share first call money due.)

Bank A/c..........Dr. 1,48,500

Calls-in-advance A/c..........Dr. 1,500

To Equity Shares First Call A/c 1,50,000

(Being share first call money received.)

Equity Share Second and Final Call A/c..........Dr. 1,50,000

To Equity Share Capital A/c 1,50,000

(Being share second call money due.)

Bank A/c..........Dr. 1,48,500

Calls-in-advance A/c..........Dr. 1,500

To Equity Share Second and Final Call A/c 1,50,000

(Being share second and final call money received.)

Working Note:
Analyse Table
Received on Transferred to Calls-in-
Shares Shares Allotment
application @ share capital @ Excess advance @ Refund
applied allotted @ Rs.2
Rs.2 Rs.2 Rs.6

I 10,000 .... 20,000 .... 20,000 .... .... 20,000

II 59,400 49,500 1,18,800 99,000 19,800 19,800 .... ....

III 600 500 6,000 1,000 5,000 1,000 3,000 1,000

70,000 50,000 1,40,800 1,00,000 44,800 20,800 3,000 21,000

OR
Working Note 1.
Sundram
No of shares allotted = 7000 shares
No of shares Applied = 7000 shares
Amount Due on Allotment = 7000 shares × Rs8 = Rs.56000
Satyam
No of shares Allotted = 500 shares

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Amount due on 1st and Final Call = 500 shares × Rs.7 = Rs. 3500
Working Note 2.
Amount transfer to Capital Reserve = ( Amount of share forfeited A/c / No of shares forfeited - Loss on Per
share on Re-issue ) × No. of Share Re-issue
Sundram = ( Rs.35000 / 7000 share - 0 )× 500 shares = Rs. 2500
Gupta = ( Rs. 4500/ 500 Share - 0 ) × 500 share = Rs. 4500
Total = Rs.7000
Journal
Debit ( Credit (
Date Particulars L.F.
Rs. ) Rs. )

1. Bank A/c Dr. 26,95,000

To Equity Share Application A/c 26,95,000

( Being Amount Received on application of share @4 per share on

320000 shares )

2. Equity Share Application A/c Dr. 26,95,000

To Equity Share Capital A/c 3,85,000

To Security Premium Reserve A/c 23,10,000

( Being amount transfer to capital a/c and adjustment of pro-rata

made.)

3. Equity Share Allotment A/c Dr. 6,16,0000

To Equity share Capital A/c 308,000

To Security Premium Reserve A/c 3,08,000

( Being Amount on allotment Due on 1,60,000 shares @ 6 each

including 3 rs. as premium)

4. Bank A/c Dr. 5,60,000

To Equity Share Allotment A/c 5,60,000

( Being amount received on Allotment )

5. Equity Share Capital A/c Dr. 63,000

Security Premium Reserve A/c Dr. 28,000

To Equity Share Forfeited A/c 35,000

To Equity Share Allotment A/c 56,000

( Being shares forfeited on which amount of call not received )

6. Equity Share First & Final call A/c Dr. 4,90,000

To Equity share Capital A/c 4,90,000

( Being amount Due on 1st & Final Call Recorded )

7. Bank A/c Dr. 4,86,500

To Equity Share First & Final call A/c 4,86,500

( Being Amount received on First and Final calls )

8. Equity Share Capital A/c Dr. 5000

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 Security Premium Reserve A/c Dr. 3000

To Equity Share Forfeited A/c 4500

To Equity Share First & Final call A/c 3500

( Being shares forfeited on which amount of call not received )

9. Bank A/c Dr. 50,000

To Equity Share Capital A/c 10,000

To Security Premium Reserve A/c 40,000

( Being shares Forfeited on which amount of call not received )

10. Equity Share Forfeited A/c Dr. 3200

To Capital Reserve A/c 3200

( Being amount of share forfeited transfer to Capital Reserve transfer

A/c )

Section B
23. (d) Investing activities
Explanation: Purchase and Sales of Shares by a manufacturing company comes under Investing activities
as an investment in other's company. Purchase or sale of share is the purchase or sale of Investment.
24. Trade Receivables turnover ratio will increase because cash collected from trade receivables will decrease
the closing trade receivables of company.
25. (d) To measure the financial strength of the business
Explanation: The main objective of analysis of financial statement is to measure the financial strength and
performance  of the firm.
26. (b) Net Increase/Decrease in cash and cash equivalents
Explanation: After calculating cash flows from different three activities (Operating, Investing and
Financing), they are added to know the net increase or decrease in cash and cash equivalents.
27. 1. Other Expenses
28. (d) average collection period
Explanation: The average collection period is calculated as: 365 days in a year divided by the accounts
receivable turnover ratio. The average collection period is the average number of days between the date
that a credit sale is made, and the date that the money is received from the customer.
29. (d) a - i, b- iii, c - ii
Explanation: Operating profit ratio indicates how much profit a company makes after paying for variable
costs of production. It is expressed as a percentage of sales and shows the efficiency of a company
controlling the costs and expenses associated with business operations.
Operating ratio is a company's operating expenses as a percentage of revenue.
Gross profit ratio is used to assess a company's financial health and business model left over from revenues
after accounting for the cost of goods sold.
 Opcning Creditors & B/P+ Closing Creditors & B/P 1,50,000+50,000+4,50,000+1,50,006
30. Average Trade Payables = 2
=
2
=₹
4,00,000
Net Credit Purchases = Total Purchases - Purchases Return - Cash Purchases
= Rs.25,00,000 - Rs.1,00,000 - Rs.4,00,000 = ₹ 20,00,000
 Net Credit Purchases  20,00,000
Trade Payables Turnover Ratio = = = 5 times
Λ verage Trade Payables  4,00,000

12 12
Average Debt Payment Period = =
5
= 2.4 months
 Trade Payable Turnover Ratio 

OR
 Debt 
Debt Equity Ratio =  Equity 

Debt equity ratio indicates the degree of protection enjoyed by Long-term lenders of company. Lower the

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 ratio from its ideal standard of 2 : 1, higher will be the degree of protection available to Long-term lenders. As
such, the debt-equity ratio of Alpha Co. is better in comparison to Salpha Co.
31. Comparative Balance Sheet of Y Ltd.
As on 31st March
Note 31st March 31st March Absolute Percentage Change
Particulars
No. 2016 2017 Change (%)

₹ ₹ ₹

I. EQUITY AND
LIABILITIES

1. Shareholders' Funds

Share Capital 20 25 5 25.00

Reserves and Surplus 36 40 4 11.11

2. Non-Current
Liabilities

Long term Borrowings 9 12 3 33.33

3. Current Liabilities 15 12 -3 -20.00

80 89 9 11.25

II. ASSETS

1. Non-Current Assets

(a) Fixed Assets:

(i) Tangible Assets 40 50 10 25.00

(ii) Intangible Assets 10 10 - -

(b) Investments 5 9 4 80.00

2. Current Assets

(a) Inventories 20 18 -2 -10.00

(b) Cash and Cash

5 2 -3 -60.00
Equivalents

80 89 9 11.25
Percentage Change:
5
i. Share Capital = × 100 = 25%
20
4
ii. Reserve and Surplus = 36
× 100 = 11.11%
3
iii. Long-term Borrowings = 9
× 100 = 33.33% and so on.
OR
Comparative Statement of Profit and Loss
for the year ended 31st March, 2015
Absolute Change Percentage Change
Particulars 2014 2015 (Increase and Decrease) (Increase and Decrease)
(Rs.) (%)

I. Revenue from Operations 50,00,000 70,00,000 20,00,000 40.00

II. Total Income 50,00,000 70,00,000 20,00,000 40.00

III. Expenses

a) Employee Benefit Expenses 20,00,000 35,00,000 15,00,000 75.00

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 b) Depreciation 5,00,000 8,00,000 3,00,000 60.00

c) Other Expenses 12,00,000 16,00,000 4,00,000 33.33

IV. Total Expenses (a+b+c) 37,00,000 59,00,000 22,00,000 59.46

V. Profit before Tax (II-IV) 13,00,000 11,00,000 (2,00,000) (15.38)

VI.Tax @ 40% (5,20,000) (4,40,000) (80,000) (15.38)

Profit after Tax 7,80,000 6,60,000 (1,20,000) (15.38)

32. Cash Flow Statement of Volvo Ltd.
for the year ended March 31, 2019
Particulars ₹ ₹

A. Cash Flow from Operating Activities

Profit as per Statement of Profit and Loss 82,500

Add:Preference Dividend (Interim dividend) 12,000

Profit before Taxation 94,500

Items to be Added:

Depreciation on Fixed Assets 35,000

Loss on sale of Fixed Assets 7,500

Interest on Debentures 5,000

Provision for Doubtful Debts 2,500

50,000

Items to be Deducted:

Interest on Investment (1,500)

Operating Profit before Working Capital Adjustments 1,43,000

Less: Increase in Current Assets

Trade Receivables (50,000)

Add: Decrease in Current Assets

Inventory 5,000

Add: Increase in Current Liabilities

Trade Payables 37,500 (7,500)

Cash Generated from Operations 1,35,500

Less: Tax Paid -

Net Cash Flows from Operating Activities 1,35,500

B. Cash Flow from Investing Activities

Sale of Fixed Assets 12,500

Purchase of Fixed Assets (1,10,000)

Purchase of Investment (25,000)

Interest on Investment 1,500

Net Cash Used in Investing Activities (1,21,000)

C. Cash Flow from Financing Activities

Proceeds form Issue of Shares Capital 25,000

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Proceeds from Issue of Debentures 50,000

Interest on Debentures Paid (5,000)

Redemption of Preference Share Capital (50,000)

Premium on Redemption of Preference Share Capital (2,500)

Dividend Paid on Preference Share Capital (12,000)

Dividend Paid on Equity (5,000)

Net Cash Flow from Financing Activities 500

D. Net Increase Decrease in Cash and Cash Equivalents (A+B+C) 15,000

Add: Cash and Cash Equivalent in the beginning of the period (6,000 + 15,000 + 4,000) 25,000

Cash and Cash Equivalents at the end of the period (12,500 + 22,500 + 5,000) 40,000
Fixed Assets Account

i. Dr. Cr.

Particulars ₹ Particulars ₹

To Balance b/d 2,55,000 By Bank A/c 12,500

To Bank A/c (B/F) 1,10,000 By Depreciation 35,000

By Profit and Loss A/c 75,000

By Balance c/d 3,10,000

3,65,000 3,65,000

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